The Minister of State for Petroleum Resources, Dr Ibe Kachikwu, has tasked indigenous operators to step up their investments and take over major operations from international oil companies.
Kachikwu made the assertion at the opening ceremony of the 2019 Nigeria Oil and Gas Opportunities Fair ( NOGOF ) in Yenagoa, Bayelsa, last week.
The 2019 NOGOF conference with about 1,500 participants was tagged: “Maximising Oil and Gas Industry for Benefit of Nigerian People”.
The minister said that it became important, especially as many were considering divesting and charting new paths.
According to him, changes in the global oil and gas industry are presently challenging the present exploration and investment strategies.
This, he said was because, oil is fast becoming a degenerating asset with alternative sources of energy taking over and attracting new investments.
Kachikwu said, while the world was moving on from fossil fuels, Nigeria has yet to take advantage of the opportunities in the sector and design strategies to harness advantages of renewables.
The minister urged indigenous firms to take over and stop playing safe if they would benefit from the opportunities availed through new trends in the industry.
Kachikwu said that the Federal Government had reduced the cost of crude production to 23 dollars per barrel from about 32 dollars.
He said that some companies in the Joint Venture with NNPC had already driven the cost down to 15 dollars.
The minister said henceforth, approval for projects in the petroleum industry would be based on the cost of producing oil and gas.
According to him, efforts are on to further ensure the cost were brought down to below 15 dollars per barrel.
He said that efforts to bring down cost of production should not be by the government or through policies, but should be driven by the private sector.
“The ministry is going to come up with a benchmark to analyse and compare companies who do business in Nigeria and what cost of production they are running.
“This is because any unbelievable cost of production, basically impacts on the revenue stream of the country.
“We need to start finding out how companies awarded recognition are doing, and why are the others not going in that direction.
“However, excuses of the environment being different or absent infrastructure can no longer hold water, because there are a lot of countries with peculiar situation as ours that are producing oil at relatively lower level.
“One of the mandates that I am giving the Department of Petroleum Resources(DPR) is that as we begin to look at new projects, the cost at which we are going to produce is going to become critical to our ability to approve those projects for you.
“This has brought us to another milestone in the industry where the crude oil loading and export can be effectively monitored from my office.
“So, it is becoming a major front burner item,” he said.
Kachikwu said that government had invested tremendously in the oil and gas sector toward building capacity and investing in human development.
He said that government had also ensure increase in production activities, and completion of Egina Project and AKK Pipelines among others.
Kachikwu said government was also working toward ensuring zero gas flare by 2020, adding that the present adminstration had impacted positively in the oil producing states.
Kachikwu, recently re-elected the President, African Petroleum Producers, for the third time, said that government had also successfully achieved the Nigerian Content Development and Monitoring Board 200 million dollars Nigerian Content Intervention Fund.
He said that the Fund was set aside to manage and lend directly to indigenous manufacturers, service providers and other key players in the oil and gas industry to meet their funding needs.
“One per cent of all contracts awarded in the upstream sector of the country’s oil and gas industry is deducted and remitted to the NCDF as stipulated by Section 104 of the Nigerian Oil and Gas Industry Content Development Act.
Also, Mr Simbi Wabote, the Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), called for policies to further drive establishment of modular refineries and local production of LPG cylinders.
According to him, there are multiple opportunities in the oil and gas sector yet to be harnessed by indigenous operators, as policies have been designed to drive the implementation by operators.
Wabote explained that in spite of the achievements recorded in the milestones set in 2017, opportunities were availed to indigenous operators, who took advantage of the five policy frameworks designed for the industry’s growth.
In his remarks, Gov. Seriake Dickson of Bayelsa, assured the operators of the state government’s commitment to stability in the state and region by oil producing state leaders.
Dickson also stressed the need for the international oil companies to commit to the environmental issues raised by communities.
The governor said that addressing such concerns would further help the state administrators to make the environment conducive for their operations.